ABSTRACT
Next to decollectivization of agriculture and introduction of foreign investment, probably the most important and profound innovation during the Deng Xiaoping era was the opening of stock exchanges in Shenzhen and Shanghai in 1990. Securities listed in Shenzhen or Shanghai can only be traded on their respective exchanges, and there is no system of dual listing on the two exchanges. Chinese investors buy and sell listed securities through brokerage firms that are members of the securities exchanges. As part of Zhu Rongji's plans for improving regulatory effectiveness in the financial sector, the China Securities Regulatory Commission (CSRC), which is directly under the State Council, has been given supreme authority to regulate and police China's securities markets and institutions. In mid-1997 the new head of the CSRC, Zhou Zhengqing, under expanded Central authority, took effective control of the Shanghai and Shenzhen exchanges by firing the incumbent presidents and appointing new ones from Beijing.
